For much of 2025, Oct. 15 was hailed as the most important day of the year for Social Security. That's because it was the date when the Social Security Administration (SSA) was scheduled to announce a 2026 cost-of-living adjustment, or COLA.
But as you may have noticed, that announcement didn't happen. We can thank the government shutdown for that.
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The Bureau of Labor Statistics (BLS) was supposed to supply September inflation data for the SSA to calculate a 2026 COLA on Oct. 15. A delay in that data has forced the SSA to push off its announcement by nine days.
At this point, though, we could be just hours away from an official COLA announcement. Whether seniors will be happy with it, though, is up for debate.
Why COLAs are so important for Social Security recipients
There's a reason lawmakers decided decades ago to make Social Security COLAs automatic -- meaning, to tie them to an inflation gauge rather than meet and vote them in year after year.
Inflation has a tendency to drive living costs higher over time. Without COLAs, Social Security recipients would be almost guaranteed to lose buying power over time -- especially since many retirees don't have savings, and therefore get all of their income from their monthly benefits.
Social Security COLAs are calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the months of July, August, and September. If the average CPI-W reading for the third quarter of a given year is higher than the average CPI-W reading from the previous year's third quarter, a COLA is applied in the new year.
To be clear, this does not mean that Social Security benefits rise automatically each year. If the CPI-W doesn't show an annual increase, Social Security benefits don't go up. However, they also cannot decrease from one year to the next.
Why 2026's Social Security COLA may disappoint -- and what to do instead
Initial estimates have pointed to a slightly larger Social Security COLA in 2026 than in 2025. But that doesn't mean seniors will be happy with the COLA they get.
If 2026's official Social Security COLA is higher than the 2.5% raise seniors got at the start of 2025, that will only be the case due to an uptick in inflation. Put another way, what seniors gain in the form of a larger COLA, they lose in the form of higher prices just about everywhere.
Plus, healthcare isn't a big component of the CPI-W, and it's one of seniors' largest expenses. So even if Social Security recipients get a seemingly large COLA in 2026, healthcare costs could chip away at it.
Let's remember, too, that seniors who are enrolled in Medicare and Social Security at the same time have their monthly Part B premiums deducted from their benefits automatically. If there's a large increase in the cost of Part B next year, which is expected to be the case, then Social Security recipients could end up with a relatively small boost to their monthly checks.
For this reason, it's best to not be too reliant on any given Social Security COLA. This applies to 2026 and in general.
Seniors who only have Social Security for income may find that they lose buying power over time as their COLAs fall short. If you're in that boat, and you're dependent on a large COLA in 2026 to better your financial situation, you may be headed for disappointment.
Instead of sitting back and waiting on your COLA, take active steps to improve your finances. That could mean cutting expenses or joining the gig economy for extra income.
Downsizing could pay off, too, if you have a lot of equity in your home. If you're able to use the proceeds of a home sale to buy a smaller property and still have money left over, you can create a retirement nest egg for yourself. That's money you can put to work by investing so it generates ongoing income -- and potentially a lot more income than any given Social Security COLA you might get.
